What are your views on the suitability of gold for institutional investors?

Q1:The portfolio manager is looking to establish repurchase agreements (“repo”) and reverse repurchase agreements (“reverse repo”) with a few counterparties. He has requested for the risk manager to put in place a collateral framework to manage the risks of the repo and reverse repo instruments. The portfolio manager has also highlighted that some counterparties have requested for the portfolio manager to accept a wider range of securities, including emerging market bonds, as collateral to provide them with greater flexibility. As a risk manager, what are the considerations in establishing the collateral framework? What are your recommendations for the framework and how would you manage the risk from accepting emerging market bonds as collateral?Q2:The portfolio manager manages a portfolio comprising mainly bonds and equities and is looking to invest in gold instruments to provide greater diversification to the portfolio. The portfolio manager plans to trade gold via gold OTC spot and options as well as gold futures. What are your views on the suitability of gold for institutional investors? As a risk manager, what are the key risks you would consider with regards to adding gold to the portfolio, and what are the controls or limits you would recommend to manage the risks?